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Doug Ford’s new budget has more money for health care, but little to help fight inflation

Finance Minister Peter Bethlenfalvy tabled a record $204.7-billion spending plan on Thursday that boosted funding for health care but cautioned that storm clouds loom.

Thestar.com
March 24, 2023
Robert Benzie

It’s a road map back to black, but the Progressive Conservatives’ budget has few new measures for Ontarians seeing red over the rising cost of living.

Finance Minister Peter Bethlenfalvy tabled a record $204.7-billion spending plan on Thursday that boosted funding for health care -- thanks in part to a post-pandemic federal cash infusion -- but cautioned that storm clouds loom.

“Ontario’s economy remains resilient, but the road ahead continues to be uncertain,” warned Bethlenfalvy as he unveiled a path to balancing the books next year.

Despite overall inflation running at 5.2 per cent -- and grocery prices up 10.6 per cent since this time last year -- Premier Doug Ford’s Tories had little in the way of additional relief for consumers, such as tax cuts.

“The post-pandemic environment has been defined by elevated inflation that put the squeeze on the wallets of families and businesses,” said Bethlenfalvy, whose 186-page budget document cited “inflation” 56 times.

“People are finding it harder to afford housing, to afford groceries, to afford other household goods,” he told the legislature, before stressing that “Ontario is not an island, and while we remain resilient, the seas around us are stormy.”

But NDP Leader Marit Stiles said the budget “fails to meet the moment” in an era when many Ontario residents are in need of help.

“People are struggling -- they’re not able to keep up with the rising costs of groceries, rent or gas,” said Stiles, urging the Tories to “bring back meaningful rent control.”

“This budget offers no relief for ordinary Ontarians,” she said.

Interim Liberal Leader John Fraser said he was “shocked” the Tories made balancing the books a priority over helping families coping with inflation.

“They didn’t balance people’s lives,” said Fraser.

“Families are hurting right now. Rents have gone up, gas has gone up, utilities have doubled,” he said.

Thanks to soaring personal income tax revenues, Bethlenfalvy said last year’s projected $19.9-billion deficit has been slashed to $2.2 billion with the 2023-24 shortfall expected to be $1.3 billion.

The treasurer said Ontario would be back in balance with $200 million in the black in 2024-25 and -- just in time for the Tories’ June 2026 re-election campaign -- a $4.4-billion surplus the following year.

“We are showing it is possible to balance a budget while investing more in housing, more in highways, more in transit, more in the skilled trades, more in new manufacturing, more in health care, more in education (and) more in the North,” he said, boasting of incentives to encourage electric-vehicle manufacturing and related mining measures to promote extraction of critical minerals.

Bethlenfalvy’s fiscal blueprint spends almost 30 per cent more than former Liberal premier Kathleen Wynne’s final $158.5-billion budget five years ago.

That includes $81 billion on health care -- up from $74.9 billion last year -- even with the elimination of $7.8 billion in time-limited COVID-19 funding.

“While we will receive $4.4 billion in additional funding over the next three years from the federal government under the recent agreement negotiated by our premier, we are investing a total of $15.3 billion more into health over that same time period,” he noted.

“We are investing every single dollar we receive from the federal government’s recent health-care funding down payment -- and a whole lot more -- into better health care services.”

A defensive Bethlenfalvy emphasized to reporters that he appreciates the toll inflation is taking, but he was forced to tout previous measures, like eliminating licence plate renewal fees, extending gas tax cuts till Dec. 31, and continuing long-existing subsidies for electricity ratepayers that have ballooned to $6.5 billion annually.

“It’s not one and done,” the finance minister told journalists when pressed.

“While our government does not control the global forces driving inflation, there are things that do lie in our control, which is why we acted early to keep costs down,” he said later in the legislature.

“We have eliminated double fares when taking GO Transit and local transit throughout much of the Greater Golden Horseshoe -- and we are expanding this initiative to include Toronto, so a commuter coming into the city only pays on one fare per trip, saving them money each way.”

The treasurer also pointed out that Queen’s Park is expanding eligibility for the Guaranteed Annual Income System payment for low-income seniors so an additional 100,000 elderly people will qualify in July 2024. Currently, 200,000 receive the benefit, which is $166 a month for individuals and $332 for couples.

In another move to help Ontario’s most vulnerable, Bethlenfalvy hailed his “historic investment of an additional $202 million each year in supportive housing and homelessness programs to provide not only a hand up, but hope, for a better life for those that need it the most.”

But the Tories’ hopes of building 1.5 million new homes over the next decade -- the rationale for Ford’s controversial opening up of 7,400 acres of protected Greenbelt lands to development -- have been dealt a setback.

Thanks to rising interest rates and other market factors, the government projects just 80,300 new housing starts this year, far below the 150,000 needed annually to achieve Ford’s target.

For next year, an estimated 79,300 new homes are expected to be built, rising to 82,700 in 2025.

“We’re taking bold action to build 1.5 million homes, but we can’t do it alone,” said Bethlenfalvy.

“The Ontario government is calling on the federal government to defer the harmonized sales tax on all new large-scale purpose-built rental housing projects.”

Green Party Leader Mike Schreiner said the reduced housing-starts projection underscores that “we do not need to open up the Greenbelt to address a housing crisis.”

“Their sprawl agenda is actually going to make life less affordable for people,” said Schreiner.

“It costs over two times more for a municipality to service a home built through sprawl versus a home built within a community that people actually want to live in.”